Finding Text
Finding 2024 – 002 Noncompliance with Allowable Cost/Cost Principle Compliance Requirement Requirement Allowable Cost/Cost Principle Compliance Requirement Type of Finding Material Weakness Criteria: 2 CFR Section 200.400 requires allowable cost principles to be followed in accordance with the Assistance Agreement. Condition: Prior to the April 2024 Modification 0015, the Assistance Agreement limited reimbursement of certain employees’ compensation, excluding the Executive Director, to 92.31% of their total compensation. The Organization requested reimbursement for 100% of certain employees’ compensation. The limitation was removed as part of Modification 0015. Cause: Subsequent to the March 2021 Assistance Agreement being awarded and finalized, the Organization negotiated with the grantor to remove the compensation limitation; however, the Assistance Agreement was not updated for this change until the April 2024 Assistance Agreement. Effect: Failure to comply with March 2021 Assistance Agreement. Questioned Costs: Based on the total labor charged, excluding the Executive Director, there are likely questioned costs, which include direct labor, fringe on direct labor, and general and administrative fringe, totaling approximately $23,000. Identification as a Repeat Finding: See finding 2023-002 included in the Summary of Prior Audit Findings. Recommendation: Management should ensure all negotiated agreements are included in the Assistance Agreement. Management Response: See Corrective Action Plan section.